* Economy worries hit stocks and oil, lift yen
* World stocks down three-quarters of a percent
* Europe shares down 0.5 percent, Japan 2.4 percent
* Yen at six week high, oil around $62 a barrel
By Jeremy Gaunt, European Investment Correspondent
LONDON, July 8 (Reuters) - Economy jitters continued to
sweep financial markets on Wednesday, weakening stocks,
propelling the Japanese yen to a six-week high and dragging oil
down to around $62 a barrel.
Investors have begun worrying that global economic recovery
will not be as quick or robust as many had hoped.
Comments in particular that a second U.S. stimulus package
may be necessary coupled with heavy U.S. job losses have hit
risk appetite. [] []
"Talk of more stimulus spending is making investors
nervous," said Kim Seong-joo, an analyst at Daewoo Securities in
Seoul.
Markets were also gearing up for the new corporate earnings
season, with aluminium giant Alcoa <AA.N> due to kick off later
on Wednesday.
Most investors are still banking on a global recovery over
the next year, albeit an undynamic one.
Barclays Wealth said on Wednesday, for example, it gave a 60
percent chance for a sluggish recovery, 20 percent for one with
real momentum and a 20 percent chance of a slide to depression.
But the recent worries have prompted a pull back from the
second quarter's sharp rally which has left many European and
U.S. stock indexes in the red for the year-to-date.
MSCI's all-country world stock index <.MIWD00000PUS> was
down three quarters of a percent, heading for its fifth day of
losses in a row.
Japanese stocks closed down 2.4 percent <>.
European shares fell in early trade, mirroring big Tuesday
losses on Wall Street, which are in the red for the year. The
FTSEurofirst 300 <> index of top European shares was down
half a percent, around levels last seen in April.
Oil firms were among the biggest losers, reflecting the fall
in energy prices. Oil fell more than $1 to $62 a barrel, on
course for its sixth consecutive fall and longest losing streak
since mid-December.
ASCENDANT YEN
Recovery doubts have helped pull currencies such as the
Australian dollar, sterling and the euro well off peaks hit in
June, and the dollar and the yen have risen in the past few
weeks.
The yen hit its highest levels in around seven weeks against
the dollar and euro.
"The sharp fall in the cross yen pairs is reflecting
speculators closing long positions in risk assets," said Lee
Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
"There is very little clarity on the global outlook, and
there is uncertainty over the earnings season."
The euro fell to as low as 130.43 yen <EURJPY=>, its lowest
since late May. The dollar hit a six-week low of 94.09 yen
<JPY=>, according to Reuters data. Sterling also reached its
lowest in more than a month against the yen of around 151.01 yen
<GBPJPY=R>.
The dollar index, a gauge of its performance against six
major currencies, was steady at 80.77 <.DXY>.
Euro zone government bond futures gained half a point,
hitting their highest intraday peak in two months as equities
were dragged lower.
The interest rate-sensitive two-year Schatz yield <EU2YT=RR>
was down 2.8 basis points at 1.196 percent. The 10-year Bund
yield <EU10YT=RR> was down 4 bps at 3.267 percent.
(Additional reporting by Tamawa Desai, editing by Mike
Peacock)
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